I'm a swing trader and stops are how I enter and exit 100% of my trades. I plan on giving IB a try but hear that the stops aren't reliable. Is this just 1% of the time or all the time? I trade exclusively Nasdaq stocks. Any feedback is appreciated...Thanks David D.
Today they were 100% bad for me. I posted the same question on another thread. Def should be around in a few hours when the Asian markets open. I only had one stop hit today so that's all I have to look at. I'm not sure if it's a routing problem or if I did something wrong but it was behaving strangely. The bottom line was that it took 3 minutes to go live after the stock ran past my stop. My first day trading at IB and I got some serious slippage. I'm not sure if stops are that popular with the folks here but they will be a big deal for me.
there was a tread on stops a while back and i was under the impression that everything was resolved. NASDAQ stops at IB are triggered on the bids or offers and thus you need to understand how they trigger to use them effectively. you can try this link: http://www.interactivebrokers.com/html/companyInfo/stop_ord.html
From the IB website on stop orders...from Def's earlier post: 4. In regards to NASD stocks, in the case of buy stops IB will elect stop orders only after we see a bid at the stop price and subsequently confirm a second bid. Only after we confirm a second bid will we send in the order. Likewise, in the case of sell stops IB will elect stop orders only after we see an offer at the stop price and subsequently confirm a second offer. Only after we confirm a second offer will we send the order. I had not read this...my own fault because I assumed... This changes the way stop orders should be placed because of the need for the intended stop price to hit the opposite side twice before triggering. This is exactly what happened in my case. I was long and the spread was .05. The bid had dropped below the stop but the ask was still above. I would rather have the stock sold when there is a trade (or two) at my stop . This is an admirable practice to attempt to prevent erroneous stop triggers but it also guarantees some slippage. We just need to adjust the stop price to account for this. Thanks Def!!!
Thanks for the replies. I think the way IB is setup is great, I hate when my stops get touched with one order and filled before reversing; but am concerned that the system reliably executes stops. I have 10-15 swing positions simultaneously and rely on stops for safety and taking profits. And I don't monitor them during the day so if a stop fails it hurts sometimes .
Why is the sell stop activated by an ask price??????? IT DOESN'T MAKE ANY SENSE!! Once the stop loss is activated,it will be sold to the best bidder ;why am I waiting for the ask price to trigger the stop????The ask price can stay the same while the bid is dropping below my target stop ,how can you possibly adjust your stop based on the ask price. This can only work with a very high volume stock which has buyers and sellers at every possible level and the spread is very small. EX Today: bY the time the ask hit the stop ,I would have been 25 cents below my target stop ,fortunately I noticed that IB didn't SELL AT my stop and I sold it myself. Confirmation is good to avoid erroneous stops but the other part(ask) of IB's mechanism is completely absurd. Am I missing something here???Any other traders comments????
Alot of other broker also do this, and I also have absolutly no idea why. This is one of the reasons I only trade Listed stocks.
What has everyone found to be the best route when using IB stops? Arca? Best? Nasdaq? I tried one today using arca and it did absolutely nothing. Both the bid and ask passed right through my stop and then the order dissapeared off my screen. I assumed that meant it was executed but when I checked it, it wasn't. I had to exit manually. I usually exit all my plays manually anyway but it's nice to know that the stops work. Right now I don't have any confidence in IB stops. I'd like to hear some success stories before I attempt another one.
I've been with IB for a long time now. I've never had any good experiences with stops. This topic keeps coming up and up and up and up again. It's pretty frustrating. It's gonna take a lot of good feedback before I ever trust an IB stop order again.
KTM You say it took 3 min for your stop to go live. So according to IB after your price was hit 3 minutes passed before another trade occured at that price. Is that what happened? Did you look at T&S, was the stock traded that infrequently? If you have a sell stop on a long, what if the next tick is below your stop price, does that count or does the IB system only trigger if theres 2 trades at that same stop price? Thanks RC